On the vibrant planet of Turo, Dr. Jumba Jookiba is found guilty by the United Galactic Federation for conducting illegal genetic experiments after he creates Experiment 626, a remarkably tough creature marked by its advanced intelligence and inclination for destruction. Having been sentenced to exile on a desolate asteroid, 626 seizes the opportunity to escape, commandeering a spaceship and crash-landing on Earth, specifically on the beautiful island of Kauai, Hawaii. Upon his arrival, the disoriented 626 finds himself struck by passing vehicles and eventually taken to a nearby animal shelter. Meanwhile, the stern Grand Councilwoman offers Jumba a chance for early release if he can successfully recapture 626, while enlisting Earth expert Agent Pleakley to assist him on this mission.
In Kauai, we meet teenage Nani Pelekai, who is doing her best to care for her younger sister, Lilo, following the tragic death of their parents in a car accident. Lilo, who is both quirky and lonely, often butts heads with Nani, causing worry for their situation as their guardianship is being scrutinized by the strict social worker Cobra Bubbles. Fearing that Lilo might be placed in foster care, Nani strives to create a sense of stability for her sister. When Lilo expresses a desire for a friend, Nani visits the animal shelter, where Lilo mistakenly adopts 626, believing he is just a dog. She affectionately names him "Stitch."
As Stitch attempts to hide from being recaptured, his first night with the Pelekais turns into chaos, resulting in a mishap during a luau where Nani is employed, causing her to lose her job—a situation that further complicates their already precarious family circumstances. Cobra Bubbles advises Nani to secure new employment and instructs Lilo to mold Stitch into a well-behaved pet. However, despite Lilo’s best efforts to transform Stitch into a model citizen, his inclination for mischief consistently undermines Nani's job pursuits.
During an afternoon outing on the surf with Nani's friend David, Stitch's presence attracts the attention of Jumba and Pleakley, whose clumsy attempt at capturing him nearly drowns Lilo. David manages to save her, but Cobra Bubbles, who witnesses the incident, decides to intervene, threatening to take Lilo into foster care. Overcome with guilt for the trouble he’s caused, Stitch absconds from the family. Meanwhile, the Grand Councilwoman decides to replace Jumba and Pleakley with Captain Gantu for the pursuit of Stitch. However, Jumba, acting on his own accord, fiercely continues the chase by employing less-than-subtle methods.
While Nani leaves Lilo at home to go for a job interview, Jumba and Pleakley use this opportunity to find Stitch and cause havoc at the Pelekai household, resulting in significant damage. Nani returns to a scene of destruction just as Cobra Bubbles arrives to take Lilo away. Distracted and upset, Lilo flees into the woods, where she finds Stitch, who finally reveals his true alien nature. Unfortunately, just as they bond, Gantu interrupts and captures both Lilo and Stitch, taking them aboard his spaceship. While Stitch manages to escape, he is left unable to rescue Lilo.
Desperate and heartbroken, Nani pleads with Jumba and Pleakley to assist her in rescuing Lilo. Initially resistant due to following orders, they change their minds when Stitch, remembering the Hawaiian concept of Shana, which Lilo taught him means "family," convinces them to aid in the mission. United in purpose, they commandeer Jumba's spaceship to chase down Gantu, ultimately succeeding in saving Lilo from his clutches.
When the Grand Councilwoman arrives to apprehend Stitch, she is pleasantly surprised by his reformed behavior. Upon discovering that Lilo has legally adopted Stitch as her pet, she permits him to remain on Earth under the protection of the United Galactic Federation. Gantu, having behaved recklessly, is fired for his incompetence. In a surprising revelation, Cobra Bubbles shares his past as a CIA agent and assures the Grand Councilwoman of the secrecy surrounding Earth, alluding to their previous encounter in Roswell, New Mexico.
With Stitch, Jumba, and Pleakley now embraced as part of their Shana, the Pelekai family takes on the task of rebuilding their home, assisted by David and Cobra Bubbles, as they embark on a new and promising chapter together.
